HARISH KUMAR GADDIPATHI,HYDERABAD vs. INCOME TAX OFFICER, WARD-14(2), HYDERABAD

Per Smt. P. Madhavi Devi, J.M.

This is assessee’s appeal for the A.Y 2010-11 against

the order of the CIT (A)-6, Hyderabad, dated 16.05.2018.

individual, filed his return of income for the A.Y 2010-11 on

21.1.2011 declaring an income of Rs.2,96,400/- and the same

was processed u/s 143(1) of the Act. Subsequently, the AO came

to know that the assessee along with others has sold immovable

property during the assessment year under consideration, but has not admitted the income from Capital Gains in the return of

income filed for the A.Y 2010-11. Therefore, the assessment was

reopened by issuance of a notice u/s 148. In response to the said

notice, the assessee filed a letter dated 3.4.2017 requesting to

treat the return of income filed on 21.01.2011 as the return filed

in compliance of the notice u/s 148 of the Act. Thereafter, the

notices u/s 143(2) and 142(1) were issued and served on the

assessee.

submitted before the AO that the assessee and three others were

the owners of the property which was sold vide sale agreement

cum GPA but the vendee had cheated the vendors and had not

complied with the terms of the agreement including the payment

of consideration to all the vendors who have executed the sale

agreement cum GPA. It was also submitted that the vendee has

not paid any consideration to the assessee and the co-owners till

the date of notice and hence sale agreement was sought to be

cancelled. The assessee also submitted that the subject property

is under his possession even on the date of filing the affidavit. The

AO, however, observed from the recitals in the AGPA that the

assessee and others have executed the sale agreement cum GPA and as per the agreement, it is seen that they have given vacant

and peaceful possession of the property to the vendees by duly

receiving the sale consideration. It was also observed that since

the assessee has received the consideration and has parted with

the possession of the property, provisions of section 53A of the

Transfer of Property Act would apply and the provisions of section

2(47)(v) of the Act also would apply. He further observed that the

vendee had pledged the property with financial institutions and

had obtained the loan of Rs.32.00 crores in the name of the

company in which he is a Director. He therefore, held that the

assessee as well as the other owners have physically handed over

the property to the vendee and hence the capital gains is

chargeable to tax in the hands of the assessee for the relevant

A.Y.

CIT (A) who dismissed the same for want of appearance by the

assessee. The CIT (A) has recorded that on a number of occasions,

the appeal was posted for hearing and the assessee has been

seeking adjournments except for the last date of hearing i.e.

26.04.2018. Against this order of the CIT (A), the assessee is in

appeal before us. In addition to the grounds of appeal filed along with Form 36, the assessee has also raised certain other

additional grounds of appeal. He sought admission of the same

and adjudication of the additional grounds as well. The assessee

also filed additional evidence being the copy of the cancellation of

sale agreement cum GPA along with the public notice also and

copy of the petition filed before the Hon'ble A.P. High Court

against the vendee and also District Registrar for cancellation of

the earlier agreement of sale cum GPA. He submitted that these

documents goes to the root of the matter and to substantiate the

assessee’s claim that the assessee has not received the sale

consideration and the possession of the property also was not

handed over to the vendee. He therefore, prayed that the

additional grounds and also the additional evidence be admitted

and remanded to the file of the AO for denovo consideration.

AO and submitted that the assessee failed to cooperate with the

CIT (A) due to which the CIT (A) dismissed the appeal. The learned

DR submitted that the matter may be remanded to the file of the

CIT (A), if necessary, for adjudication on merits.

on record, we find that the assessee’s stand has been that he has

not received the sale consideration and also that he has not given

the possession of the property to the vendee. The AO has gone by

the recitals in the Registered agreement of Sale-cum-GPA that the

assessee has received the payment and has given the possession

of the property. We are of the opinion that the agreement of sale

cum GPA cannot be held to be the complete legal transfer of the

title. Further, the assessee’s contention that he has filed an

application for cancellation of the registration document and also

that his petition for such cancellation is pending before the

Hon'ble A.P. High Court is also worth consideration. In view of the

same, we deem it fit and proper to admit the additional grounds

as well as the additional evidence. Since this evidence requires

verification, we deem it fit to remand the issue to the file of the AO

for de novo consideration in accordance with the law. Needless to

mention that the assessee should be given a fair opportunity of

hearing and the assessee also shall co-operate with the AO for

early completion of the assessment.

statistical purposes.

order, the Stay Application filed by the assessee has become

infructuous and accordingly dismissed.

Order pronounced in the Open Court on 10th July, 2019.

Sd/- Sd/- (A. Mohan Alankamony) (P. Madhavi Devi) Accountant Member Judicial Member

Hyderabad, dated 10th July, 2019. Vinodan/sps

Copy to:

1 Shri Harish Kumar Gaddipathi, Flat No.304, 4th Floor, Legend Apartments, Banjara Hills, Hyderabad 500034 2 ITO Ward 14(2) Room No.634, 6th Floor, C Block, IT Towers, AC Guards, Hyderabad 3 CIT (A)-6 Hyderabad 4 Pr. CIT – 6 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File

By Order

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